Partnerships are one of the most common business structures in the U.S. Unfortunately, like any close relationship, business partnerships can sometimes be fraught with tensions. It’s common for partnership disputes to arise in Texas and elsewhere in the country. When that happens, it can sometimes lead to lawsuits and other proceedings in court.
Filing in the right place
One of the keys to resolving business lawsuits is to file them in the proper court. Different courts hear different kinds of cases. Recently in Texas, a probate court ordered a business into receivership. This situation was somewhat complex as one partner in the business had died.
The dispute started when the executrix of a will sued the other partners to access declarations related to the business. Another partner asked for a receivership based on claims of mismanagement. The court granted the receivership. Finally, the managing partner sought an appeal for that decision.
Ultimately, the appeal regarding the receivership was successful, and the reason was simple. The court of appeals ruled that the probate court had no authority to place the business into receivership. In Texas, only a district court can place a business into a rehabilitative receivership.
One important lesson to take from this case is that it’s important to file paperwork with the proper court. Although the dispute involved the estate of one partner, probate court wasn’t really the right venue for that particular action. Filing with the wrong court led to a long appeals process that was inconvenient for everybody.
Working with a lawyer who has experience with partnership disputes can help you avoid these kinds of problems. It can also be a good idea to explore other kinds of conflict resolution. For example, if an agreement can be reached through mediation, everyone may save time and money compared to going to trial.
